How Suppliers Are Using Innovation in Intelligent Packaging and Preservation to Keep Store Shelves Stocked and Keep Customers Happy

FARMINGTON, Conn., April 3, 2013 /PRNewswire-iReach/ -- Top business headlines last week featured Wal-Mart's problem with keeping store shelves stocked and consequentially, keeping their customers happy. At discount stores like Wal-Mart, keeping prices low means cutting costs on the quality of their workforce, which apparently translates into "shelf-outs". Known for their vendor-managed inventory system, Wal-mart excels at maintaining optimal inventory levels to prevent stock-outs. Because of Wal-Mart's notoriously low prices and wide range of products, consumers purchase more rapidly creating greater shelving turnover and this ends up creating more work for the employees who are paid at a discount rate.

Perhaps Wal-mart might take a cue from the discount supermarket chain Aldi, where the customer-facing store level is the stock room; pallets are dropped in and plopped as is from truck to store. Wal-mart's stocking challenge means consumers are turning to competitor stores that do have the products they need on the shelves. It might be the case that retailers who experience lower inventory turnovers will have products sitting on their shelves, but how long have they been sitting there?

The nature of consumer good supply chains often means that products sitting on the shelves today were manufactured, packaged, and shipped four months prior on average. Innovations in intelligent packaging and preservation tactics means one less thing to worry about when it comes to keeping products on the shelf for customers to buy. In the food and beverage industry, appropriate preservation and packaging techniques are adequate solutions to combat lead-time lags on the supply side in keeping stores stocked continuously and keeping customers happy. Meanwhile, increasing demand for fresh natural food has led to the development of inventive and natural preservatives by the manufactures. From preservation to advanced packaging, refrigeration or freezing, manufacturers and processors are utilizing all resources to ensure that foods and beverages attain and retain their highest level of taste, freshness, safety, and health to satisfy consumer demand.

The new report expects total growth in the global preservation markets (including preservatives, packaging, and other shelf-life extenders) will reach an estimated compound annual growth rate (CAGR) of 3.3 percent between 2012 and 2017. Food and beverage packaging was the leader with more than $267.4 billion in revenue in 2011; increase in this sector is anticipated to be at 2.1 percent CAGR through 2017. The chilling and heating market occupied the next-highest slot in the global preservation market with a sales figure of nearly $113.9 billion in 2011, rising from about $110.1 billion in 2010. Sales for encapsulation, irradiation, and other preservation techniques posted close to $43.9 billion in 2011, and 2012-2017 CAGR is expected to be a promising 8.4 percent in this sector. Finally, food preservatives accounted for sales of nearly $3 billion during 2011, and the projected market value will be nearly $4.4 billion in 2017, for a five-year CAGR of 6.7 percent.

The global food additives market represents a multibillion dollar industry. The new report forecasts that food additives market revenues will reach $36.1 billion in 2018 at a compound annual growth rate of 3.6%. Significant growth opportunities in the food additives market exist in the segments of enzymes, fat replacers and shelf life stabilizers. Companies such as Givaudan, Archer Daniels Midland (ADM), BASF, and Danisco are some of the key participants in the food additives market.

Growing demand for convenience foods is a driving factor in the expanding shelf-life food additives market in Brazil. Currently, hindered phenols are the predominant additives in volume, followed by natural extracts segments. New healthy trends and consumers awareness regarding health issues is expected to increase, decreasing synthetic additives consumption. However, the shift is expected to happen in the long term, as natural and healthier alternatives are more expensive and price is still an important factor in the market.

This report examines shelf-life food additive trends, customer needs, market drivers and inhibitors, and tips for companies to stay competitive in this market.

Find more market research for the packaging and food additives industries

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